Good day and welcome to the Ophthotech Corporation's first-quarter 2017 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Kathy Galante. Please go ahead, ma'am.

Before we begin, I would like to remind you that today we will be making statements relating to Ophthotech's future expectations regarding operational, financial, and development matters, including statements regarding our projected use of cash and cash balances; the timing, progress, and results of the Fovista Phase III clinical program and our Zimura clinical program; and the implementation of a new strategic plan. These statements constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. These statements cover many events and matters that are subject to various risks that could cause actual results to differ materially from those expressed in any forward-looking statement, including risks relating to the wind-down of various clinical trials, the implementation of a reduction in personnel, the negotiation and consummation of in-license and/or acquisition transactions, and availability of data from clinical trials. I refer you to our SEC filings and in particular to the risk factors section in our annual report on Form 10-K filed on February 28, 2017, for a detailed description of the risk factors affecting our business.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we disclaim any obligation to do so, even if our views do change.

Thanks, Kathy, and thank you to everyone for joining us on the call this morning.

Last week, we announced a leadership transition that will take effect on July 1, 2017. As part of this change, I will transition from Chief Executive Officer of Ophthotech to the newly created role of Executive Chairman. Concurrent with this transition, on behalf of the Board and myself, we are thrilled that Glenn has accepted the position of Chief Executive Officer of the Company. Glenn will retain his role as President and has been nominated as a Class One Director for election at the Company's upcoming annual meeting of stockholders on May 19, 2017.

Glenn is an accomplished leader in the healthcare industry, with extensive financial, operational, and business development experience. Glenn's outstanding track record in the biopharma industry makes him an ideal choice as CEO to fulfill our Company's current and future needs.

The Company also announced the promotion of David F. Carroll to Chief Financial Officer and Treasurer effective immediately. Mr. Carroll was previously Senior Vice President of Finance. Dave has more than 25 years of experience in the life science industry, including eight years at The Medicines Company in several senior financial leadership roles. I'm looking forward to working with David in his new role as CFO.

In February 2017, we announced that the Company initiated a plan to review strategic alternatives. Without limiting any option, the principal focus of a strategic review plan is to actively explore opportunities to obtain rights to additional products, product candidates, and technologies to treat ophthalmic diseases, particularly those in the back of the eye.

We are particularly interested in obtaining rights to product candidates for ocular indications with high unmet medical need. We believe that our experience and expertise in ophthalmology positions us well to explore and critically evaluate a variety of opportunities. We also believe that our focus on diseases of the eye and our experienced management team will make us an attractive collaborator or acquirer for companies seeking to outlicense or sell products, product candidates, or technologies.

We've also previously announced that we engaged Leerink Partners as a financial advisor to assist both management and the Board in evaluating the Company's strategic alternatives. As part of our updated business plan, we continue to review whether there is any scientific rationale with potentially developing our current product candidates, Fovista and Zimura, in one or more new ophthalmic indications where there is high unmet medical need.

Our goal as part of this overall plan is to align our corporate resources relative to pursuing development of a potentially broader product pipeline. We plan to reassess our existing Fovista and Zimura development programs throughout 2017 as the implementation of our updated business plan progresses and evolves.

In the meantime, we are continuing to develop Zimura in both geographic atrophy, a form of dry AMD, as well as Zimura in the treatment of wet AMD. Our reassessment of the Zimura development program in dry AMD may be particularly affected by results of a competitor's Phase III trial of a complement inhibitor being studied for the treatment of geographic atrophy. Results from this competitor's trial are expected in the second half of 2017.

We expect that our reassessment of Fovista development program for the treatment of wet AMD will be primarily determined by the initial topline data from our remaining Fovista Phase III trial for the treatment of wet AMD, also known as OPH-1004, which investigates Fovista in combination with Eylea and Avastin. Topline data in this trial is expected in the second half of 2017.

As a result of our reassessment, we may modify, expand, or terminate some or all of these development programs or clinical trials at any time.

Our future development pipeline could include additional product candidates or technologies that we may acquire or in-license and/or the future development of Zimura or Fovista. As part of our strategic review, we may also consider other alternatives, including the acquisition of products, product candidates, or technology for other assets outside of ophthalmology. This could include mergers or other transactions involving some or all of our assets. We cannot be sure if or when the strategic review process will result in any transaction.

I'm also excited to continue to work very closely with David Guyer. I look forward to his continued guidance and contributions to Ophthotech. As David mentioned earlier, we are pleased that Dave Carroll was promoted to Chief Financial Officer. As you know, prior to Ophthotech Dave and I worked at The Medicines Company for several years. Dave's outstanding financial expertise in the life science industry will be instrumental as we execute a strategy to maximize shareholder value.

I'd like to now turn the call back over to David, who will review the first-quarter 2017 results.

Thank you, Glenn. I'm excited to have the opportunity to contribute to the Company in this new role. I look forward to working closely with you, David, and the entire Ophthotech team. I'd like to now give a brief overview of our Q1 operating results versus 2016 and also review our expected year-end cash balance.

For the quarter, our net loss totaled $43.1 million or $1.20 per diluted share, compared to a net loss of $36.3 million or $1.03 per diluted share for Q1 2016, as lower R&D and G&A expenses did not offset the decline in collaboration revenue. Collaboration revenue was $1.7 million for the quarter, compared to $15.7 million for Q1 2016. Collaboration revenues decreased due to a decrease in shipments of Fovista API to Novartis.

R&D expenses were $32 million versus $37.8 million for Q1 2016. Q1 2017 R&D expenses include approximately $4.8 million in severance costs relating to the Company's previously announced reduction in personnel. R&D expenses decreased year over year primarily due to a decrease in the Company's Fovista Phase III clinical program, including decreased manufacturing expenses.

G&A expenses were $13.2 million versus $14.7 million for Q1 2016. G&A expenses include approximately $3.9 million in severance and lease termination costs. G&A expenses decreased year over year primarily due to a decrease in costs to support the Company's operations and infrastructure.

Turning to our cash balance, our cash balance at March 31 was approximately $228 million. We expect to spend another $45 million to $55 million on implementing a reduction in personnel, [of] winding down the Phase III Fovista in combination with Lucentis clinical trials, determination of the Fovista expansion studies, cancellation fees related to manufacturing commitments, and obtaining initial topline data in the second half of 2017 for the Phase III Fovista in combination with Eylea or Avastin clinical trial.

We expect our year-end cash balance to range between $140 million to $160 million, excluding any potential business development activities or any changes to the Company's current clinical development programs.

Finally, fully diluted weighted average shares outstanding for the quarter were approximately 35.8 million. I would now like to turn the call back over to David. Thank you for your time.

David, on Zimura, just going back to the data from the dose escalation study where you had a dose-dependent impact on visual acuity, do you have any data on what happened to those patients after Zimura was withdrawn? Obviously, the idea being that you would see a material drop in visual acuity with the withdrawal of Zimura. Thanks.

We do not have any information after the discontinuation of the trial. It's only during the clinical trial. As you know, they got more intense dosing at the beginning and then they got less. They got only two doses over, I think it's, every 12 weeks afterwards. And at that point, we noticed an on and off effect, but at the conclusion of the trial, the patients, we do not have any follow-up afterwards.

Okay. Thanks. And then with regards to the Roche study for lampalizumab, obviously in the MAHALO study they showed a better effect in the complement factor I positive patients, but not in the CFI-negative patients, so if it turns out that the Roche study is positive but it's driven by CFI positive, what is the evidence that you have for Zimura that could suggest activity in CFI-negative patients, which would offer a development opportunity? If you have any data there. Thanks.

This one, we do not have any specific data based on a genetic analysis, but, obviously, if there is any specific data regarding any specific gene expression in their data, we may definitely look into that.

Okay. And just one question on the financials, what percent of the 2017 budget have you allocated -- this is, I guess, for David -- have you allocated to biz dev opportunities or strategic initiatives? Thank you.

Yigal, it's Glenn. I'll actually take that. It's essentially people costs at this point. If we get into a situation where we're looking at specific data issues, we may hire consultants. I would say the number overall is relatively small if you look at those potential incremental costs, but we have put aside some money for both, obviously, internal resources devoted to this, as well as some third-party costs, but the number is small.

I will tell you that a large portion of the folks that do remain would be involved in business development because it really covers the full range of things like C&C, clinical, clinical operations, regulatory, business development, project management. So a lot of those folks do remain, a small group, and they would be looking at those opportunities.

I thought you were talking about debt. It depends. I don't know if we can provide any guidance on that right now. Obviously, we have a cash balance. It would be a burn in cash to any business development opportunity. So, I think the only time we could answer that is once we identify specific opportunities.

Hi, guys. Thanks so much for taking the question. I was just hoping to push a little bit on if you could walk us through how you are thinking about timing of the strategic review and if there are some internal goals on the time frame in which you hope to complete this. Thanks.

Again, as we mentioned, we don't have a specific date, but it obviously is a priority to the Company and to the Board to get clarity around future direction. I think the only thing I can mention on timing is that there is a sense of urgency, but also to do the right thing for the Company and its shareholders. So we don't have a specific date, but I will tell you it is a top priority to come to an answer as quick as possible as the Board is actively involved in discussions with us all the time about that.

Hi, guys. This is David on for Yatin; thanks for taking my question. Could you just maybe talk about your expectations for the upcoming topline data from the third Fovista Phase III trial? I guess the investor expectations for these results are pretty low, given the disappointing data from the first two trials. What would you do if the third Fovista trial reads positive?

David, I think the question is, one, we would obviously have a discussion with the regulators both here in the United States and Europe first to give guidance as to what's the path forward. It may include a second trial, and, if you remember, we do have a partner ex-US for this. I think once we have the guidance on any additional investment that was needed, we could answer that question with more certainty.

But you did see our cash balance today. I don't want to say we can't answer at this point whether it's sufficient or not, but I think we need the guidance from the regulatory agencies as to what the path is forward and then we can answer the question on capital.